United States v. Gilmore

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH  (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU )LOH 1DPH DS 81,7('67$7(6&28572)$33($/6 )257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB 81,7(' 67$7(6 2) $0(5,&$ ; 3ODLQWLII$SSHOOHH    1R Y  !  .(9,1 *,/025(  'HIHQGDQW$SSHOODQW  1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW&OHYHODQG 1Rn3DWULFLD$*DXJKDQ'LVWULFWsXGJH $UJXHG1RYHPEHU 'HFLGHGDQG)LOHG)HEUXDU\ %HIRUH&/$ V@KDOO EH ILQHG XQGHU WKLV WLWOH RU LPSULVRQHG QRW PRUH WKDQ WZHQW\ \HDUV RU ERWK  86& † D  8QLWHG6WDWHVY*LOPRUH 1R 1R 8QLWHG6WDWHVY*LOPRUH  $SSO\LQJWKHVHFULWHULDWR*LOPRUHjVFDVHLWLVHYLGHQWWKDW WXUQHGEDFNZDUGVGDUNJODVVHVDQGDIDNHEHDUGZHQWTXLFNO\ WKHGLVWULFWFRXUWGLGQRWDEXVHLWVGLVFUHWLRQLQGHQ\LQJWKH WRDWHOOHUjVZLQGRZDQGKDQGHGWHOOHU5HEHFFD2OVRQDQHDWO\ PRWLRQV*LOPRUHjVGHIHQVHZDVQRWSODXVLEOH7KHHYLGHQFH KDQGZULWWHQGHPDQGQRWHWKDWUHDGm*LYHPH\RXUPRQH\EH WKDWKHZDVWKHSHUSHWUDWRUZDVRYHUZKHOPLQJ*LOPRUHFDQ TXLHWl  2OVRQ IHOW VFDUHG IUR]H IRU D PRPHQW DQG WKHQ SRLQWWRQRWKLQJWKDWFRXOGKDYHEHHQGRQHE\DQH[SHUWRUDQ KDQGHGRYHUKHUODUJHELOOV*LOPRUHUDQRXWRIWKHEDQNZLWK LQYHVWLJDWRU WKDW KDG WKH SRWHQWLDO RI KHOSLQJ KLV FDVH  *LOPRUHZDVQRWLQDQ\ZD\SUHMXGLFHGE\DODFNRIH[SHUWRU LQYHVWLJDWLYH VHUYLFHV  $ GLVWULFW FRXUW QHHG QRW JUDQW DQ $XJXVW    &KDUWHU 2QH %DQN  &OLIWRQ LQGLJHQWjVPRWLRQXQGHU†$RQWKHRIIFKDQFHWKDWWKH %RXOHYDUG &RXQW 7ZR  *LOPRUH DJDLQ ZRUH KLV EODFN UHTXHVWHGVHUYLFHVPLJKWWXUQXSVRPHWKLQJ EDVHEDOOKDWRQEDFNZDUGVGDUNVXQJODVVHVDQGWKLVWLPHD IDNHJRDWHHWKDWDFFRUGLQJWRVHQLRUWHOOHU(GZDUG.DVXQLF $)),50(' mGLGQjWORRNULJKWl+HSURGXFHGDQRWHZKLFKVDLGm*LYH PHWKHPRQH\lDQGm*LYHWKHQRWHEDFNl:KHQ.DVXQLF EHJDQWRWDNHPRQH\RXWRIKLVGUDZHU*LOPRUHVDLGm1R EDLWl,QWKHUHIOHFWLRQIURP*LOPRUHjVVXQJODVVHV.DVXQLF VDZIHDULQKLPVHOIDQGKDQGHGRYHUPRQH\*LOPRUHOHIWWKH EDQNZLWK $XJXVW   &KDUWHU 2QH %DQN  /RUDLQ $YHQXH&RXQW7KUHH%DFNDWWKHVLWHRIWKHILUVWKHLVW *LOPRUH HQWHUHG WKH EDQN ZLWKRXW KLV FDS EXW ZHDULQJ VXQJODVVHVDQGDQREYLRXVO\IDNHGDUNEHDUGDQGPXVWDFKH 7HOOHU 7RQ\D +DUWH LPPHGLDWHO\ VXUPLVHG IURP *LOPRUHjV DFWLRQVDQGDSSHDUDQFHWKDWDUREEHU\ZDVLQSURJUHVV:KHQ *LOPRUH DSSURDFKHG KHU WHOOHU ZLQGRZ KH KDQGHG KHU D GHPDQGQRWH+DUWHZDVVFDUHGDQGGLGQRWZDQWWRORRNDW WKH UREEHU  ,QVWHDG IHHOLQJ VLFN VKH KDQGHG RYHU VRPH PRQH\DQGDG\HSDFNZLWKRXWUHDGLQJWKHQRWH*LOPRUHOHIW WKHEDQN7KHDPRXQWWDNHQZDV$ZLWQHVVRXWVLGH WKHEDQNREVHUYHG*LOPRUHUXQQLQJIURPWKHEDQNZLWKUHG VPRNHFRPLQJRXWRIKLVVKLUW 2FWREHU&KDUWHU2QH%DQN&OLIWRQ %RXOHYDUG&RXQW)RXU2QWKLVRFFDVLRQ*LOPRUHZRUHD EHUHW RU mJROI KDWl DQG DQ REYLRXVO\ IDNH JRDWHH ZKLFK ORRNHGWRWHOOHU6KDURQ+DOOOLNHWKHRQHKHKDGZRUQZKLOHDW WKLV VDPH EDQN LQ $XJXVW  7KRXJK *LOPRUH ZDV ZHDULQJ QHLWKHUKLVEDVHEDOOFDSQRUVXQJODVVHV+DOOUHFRJQL]HGKLP IURPKLVSUHYLRXVYLVLW$JDLQ*LOPRUHSURGXFHGDGHPDQG QRWHZKLFK+DOOGLGQRWUHDG6KHVWDUWHGWRKDQGRYHUWKH  8QLWHG6WDWHVY*LOPRUH 1R 1R 8QLWHG6WDWHVY*LOPRUH  PRQH\EXWZKHQVKHGLGQRWGRVRTXLFNO\HQRXJKWRVXLW GHIHQVHjlHPSKDVLVLQRULJLQDOTXRWLQJ8QLWHG6WDWHVY *LOPRUHKHEHFDPHLUULWDWHGDQGVDLGm/HWjVJRlRUZRUGVWR $OGHQ)GWK&LU8QLWHG6WDWHVY WKDWHIIHFW+HOHIWWKHEDQNZLWK /DEDQVDW)GWK&LUm>7KHGHIHQGDQW@ PXVW GHPRQVWUDWH ERWK WKDW UHDVRQDEO\ FRPSHWHQW FRXQVHO 1RYHPEHU3DUNYLHZ)HGHUDO6DYLQJV%DQN ZRXOGKDYHUHTXLUHGWKHDVVLVWDQFHRIWKHUHTXHVWHGH[SHUWIRU &OLIWRQ%RXOHYDUG/DNHZRRG2KLR&RXQW)LYH D SD\LQJ FOLHQW DQG WKDW KH ZDV SUHMXGLFHG E\ WKH ODFN RI 'HFLGLQJWRWU\DGLIIHUHQWEDQN*LOPRUHZDONHGLQDJDLQ H[SHUWDVVLVWDQFHl8QLWHG6WDWHVY0DQQLQJ)G ZHDULQJKLVEDVHEDOOFDSRQEDFNZDUGVDQGGDUNVXQJODVVHV  VW &LU  m>(@[SHUW VHUYLFHV KDYH EHHQ IRXQG 7KLV WLPH KH KDG QR IDFLDO KDLU IDNH RU OHJLWLPDWH  +H QHFHVVDU\ZKHQWKHSURIIHUHGH[SHUWWHVWLPRQ\ZDVSLYRWDOWR VWHSSHGXSWRWHOOHU/HLVD+DZU\ONRjVZLQGRZ DQGKDQGHG WKHLQGLJHQWGHIHQGDQWjVGHIHQVHl0DQQLQJY1L[)G RYHUDQRWHZKLFKUHDGm+DQGRYHUPRQH\l$IWHUDmIHZ WK&LUm>5@HIXVDOWRDXWKRUL]HIXQGVXQGHU VHFRQGVLQVKRFNl*LOPRUHGHPDQGHGm1RZl+DZU\ONR 86&†$LVQRWUHYHUVLEOHHUURUDEVHQWFOHDUDQG WHVWLILHGm,GLGQjWNQRZLIP\OLIHZDVLQGDQJHURULIKHKDG FRQYLQFLQJ HYLGHQFH RI SUHMXGLFHl  8QLWHG 6WDWHV Y DZHDSRQRULIKHZDVJRLQJWRKLWPHl+DZU\ONRVWDWHGm, 3HUUHUD)GWK&LUm7RVKRZUHYHUVLEOH ZDVMXVWVFDUHGIRUP\VHOIDQGMXVWZDQWHGLWWREHRYHUl6KH HUURU LQ D GLVWULFW FRXUW V UHIXVDO WR DSSRLQW DQ H[SHUW D TXLFNO\KDQGHGRYHUDQG*LOPRUHOHIWWKHEDQN GHIHQGDQW PXVW GHPRQVWUDWH WKDW WKH FRXUW V UHIXVDO ZDV SUHMXGLFLDOWRKLVGHIHQVHl8QLWHG6WDWHVY2OLYHU)G 'HFHPEHU&KDUWHU2QH%DQN&OLIWRQ G&LUm>0@RVWFRXUWVUHO\RQWKHMXGJPHQW %RXOHYDUG&RXQW6L[%DFNDWWKLVEDQNEUDQFKIRUWKH RIWKHGHIHQVHDWWRUQH\LIKHPDNHVDUHDVRQDEOHUHTXHVWLQ WKLUGWLPH*LOPRUHDJDLQZRUHKLVIDNHJRDWHHEXWQRFDS FLUFXPVWDQFHVLQZKLFKKHZRXOGLQGHSHQGHQWO\HQJDJHVXFK +H ZDV UHFRJQL]HG E\ VHYHUDO WHOOHUV LQFOXGLQJ (GZDUG VHUYLFHVLIKLVFOLHQWZDVDEOHWRSD\IRUWKHPl7KLVFLUFXLW .DVXQLFDVWKHSHUVRQZKRKDGSUHYLRXVO\UREEHGWKHEDQN KDVUHFRJQL]HGVRPHRIWKHVHYDU\LQJDSSURDFKHVEXWKDVQRW *LOPRUHKDQGHGWHOOHU0LFKHOOH&RORQDQRWHWKDWVDLGm+DQG KHUHWRIRUHDGRSWHGDQ\UXOHRILWVRZQ6HH8QLWHG6WDWHVY RYHU\RXUPRQH\l&RORQGLGVRDQG*LOPRUHOHIWZLWK 2VRED)GWK&LUILQGLQJWKDWGHQLDO RIUHTXHVWIRULQYHVWLJDWLYHVHUYLFHVZDVSURSHUXQGHUDQ\RI sDQXDU\    &KDUWHU 2QH %DQN  /RUDLQ WKH DSSURDFKHV XWLOL]HG E\ WKH 7KLUG (LJKWK DQG 1LQWK $YHQXH&RXQW6HYHQ)RUWKHWKLUGWLPH*LOPRUHHQWHUHG &LUFXLWV WKLVEUDQFK+HZRUHVXQJODVVHVDIDNHPXVWDFKHDQGDNQLW FDS  +H KHOG XS D QRWH ZLWK WZR KDQGV WR WHOOHU 3HWHU :HV\QWKHVL]HWKHH[LVWLQJVWDQGDUGVRIRWKHUFLUFXLWV$Q 3RORPVN\+RZHYHUWR3RORPVN\WKHQRWHORRNHGEODQN LQGLJHQWGHIHQGDQWPD\REWDLQDXWKRUL]DWLRQIRULQYHVWLJDWLYH :KHQ 3RORPVN\ VDZ WKLV KH DVNHG m:KDW"l  *LOPRUH H[SHUWRURWKHUVHUYLFHVXQGHU86&†$HXSRQ UHVSRQGHGm WHOOHU@ ZRXOG EH PHW E\ IRUFHl   8QLWHG GLVWULFWFRXUWjVGHQLDORIWKHPRWLRQVRQWKHLUPHULWV 6WDWHVY:DOGRQ)GWK&LUFLWDWLRQ DQGLQWHUQDOTXRWDWLRQPDUNVRPLWWHG8QLWHG6WDWHVY3HUU\ &RXUWVKDYHWDNHQYDU\LQJDSSURDFKHVDVWRZKDWFULWHULDDUH  )G   WK &LU  FLWLQJ 8QLWHG 6WDWHV Y WREHXVHGLQHYDOXDWLQJDQLQGLJHQWGHIHQGDQWjVPRWLRQXQGHU sRQHV  )G   WK &LU   :KHWKHU 86&†$IRULQYHVWLJDWLYHH[SHUWRURWKHUVHUYLFHV LQWLPLGDWLRQXQGHU86&†DH[LVWVLQDSDUWLFXODU 6HH8QLWHG6WDWHVY*RQ]DOHV)GQWK FDVHLVGHWHUPLQHGE\DQREMHFWLYHWHVWZKHWKHUDQRUGLQDU\ &LUm>'@HIHQGDQWVPXVWSURYLGHWKHGLVWULFWFRXUWZLWK SHUVRQLQWKHWHOOHUjVSRVLWLRQFRXOGUHDVRQDEO\LQIHUDWKUHDW H[SOLFLW GHWDLO VKRZLQJ ZK\ WKH UHTXHVWHG VHUYLFHV DUH RIERGLO\KDUPIURPWKHGHIHQGDQWjVDFWV6HH8QLWHG6WDWHV µQHFHVVDU\jWRDQDGHTXDWHGHIHQVHDQGZKDWWKHGHIHQGDQW Y+LOO)GWK&LU8QLWHG6WDWHVY H[SHFWHG WR ILQG E\ XVLQJ WKH VHUYLFHVl 8QLWHG 6WDWHV Y %XUQV  )G   VW &LU  8QLWHG 6WDWHV Y 5RPDQ)GG&LUm>$@FRXUWVKRXOG :RRGUXS)GWK&LU8QLWHG6WDWHVY ILUVW µVDWLVI\ LWVHOI WKDW D GHIHQGDQW PD\ KDYH D SODXVLEOH  8QLWHG6WDWHVY*LOPRUH 1R 1R 8QLWHG6WDWHVY*LOPRUH  0F&DUW\)GWK&LUVHHDOVR8QLWHG ,,, 6WDWHV Y 5RELQVRQ  )G   WK &LU  DSSURYLQJGLVWULFWFRXUWjVMXU\LQVWUXFWLRQWKDWmLQWLPLGDWLRQ 7KUHHGD\VDIWHUDPRWLRQVGHDGOLQHVHWE\WKHGLVWULFWFRXUW PXVW EH HVWDEOLVKHG E\ SURRI RI RQH RU PRUH DFWV RU KDGSDVVHGDQGVHYHQWHHQGD\VSULRUWRWULDO*LOPRUHILOHGDQ VWDWHPHQWVRIWKHDFFXVHGZKLFKZHUHGRQHRUPDGHLQVXFK H[SDUWHPRWLRQSXUVXDQWWR86&†$HVHHNLQJ DPDQQHUDQGXQGHUVXFKFLUFXPVWDQFHVDVZRXOGSURGXFHLQ IXQGVIRUDQLQYHVWLJDWRUDQGH[SHUW7KHGLVWULFWFRXUWGHQLHG WKHRUGLQDU\SHUVRQIHDURIERGLO\KDUPl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†D5RELQVRQ)GDW VHH DOVR :DOGRQ  )G DW  m,W LV LPPDWHULDO WKDW :DOGRQGLGQRWEUDQGLVKDZHDSRQl+LOO)GDW LQ VXFK VDYLQJV DQG ORDQ DVVRFLDWLRQ RU EXLOGLQJ RU SDUW WKHUHRI m>'@HIHQGDQWjVDFWLRQVFDQULVHWRWKHOHYHORILQWLPLGDWLRQLI VR XVHG DQ\ IHORQ\ DIIHFWLQJ VXFK EDQN FUHGLW XQLRQ RU VXFK KHFRQIURQWHGDEDQNHPSOR\HHGXULQJWKHFRPPLVVLRQRIWKH VDYLQJV DQG ORDQ DVVRFLDWLRQ DQG LQ YLRODWLRQ RI DQ\ VWDWXWH RI WKH FULPHHYHQLIWKHGHIHQGDQWZDVXQDUPHGRUGLGQRWH[SOLFLWO\ 8QLWHG 6WDWHV RU DQ\ ODUFHQ\ WKUHDWHQDEDQNHPSOR\HHl8QLWHG6WDWHVY/XFDV)G 6KDOO EH ILQHG XQGHU WKLV WLWOH RU LPSULVRQHG QRW PRUH WKDQ WK&LUµ>(@[SUHVVWKUHDWVRIERGLO\KDUP WZHQW\ \HDUV RU ERWK WKUHDWHQLQJ ERG\ PRWLRQV RU WKH SK\VLFDO SRVVLELOLW\ RI FRQFHDOHGZHDSRQ>V@jDUHQRWUHTXLUHGIRUDFRQYLFWLRQIRU  86& † D 7KLV SRUWLRQ RI WKH VWDWXWH DSSHDUV WR FULPLQDOL]H EDQN UREEHU\ E\ LQWLPLGDWLRQl TXRWLQJ 8QLWHG 6WDWHV Y HQWHULQJ D EDQN ZLWK WKH LQWHQW WR FRPPLW D IHORQ\ LQFOXGLQJ ODUFHQ\ +RSNLQV)GWK&LU8QLWHG6WDWHV $OWKRXJK WKLV SDUDJUDSK RI † D ZDV QRW FKDUJHG LQ WKLV FDVH WKH HYLGHQFH ZRXOG KDYH VXSSRUWHG WKH FRQYLFWLRQ XQGHU LW HYHQ LI *LOPRUH Y+HQVRQ)GVW&LUm1HLWKHUWKH RQO\ LQWHQGHG WR FRPPLW D ODUFHQ\ 7KH SHQDOW\ IRU D FRQYLFWLRQ XQGHU DFWXDORUWKUHDWHQHGGLVSOD\RIDZHDSRQQRUDQH[SOLFLWWKUHDW WKLV VHFRQG SDUDJUDSK RI † D LV WKH VDPH DV WKDW IRU EDQN UREEHU\ E\ RI IRUFH LV HVVHQWLDO WR HVWDEOLVK LQWLPLGDWLRQ XQGHU WKH IRUFH DQG YLROHQFH RU E\ LQWLPLGDWLRQ DV VHW IRUWK LQ WKH ILUVW SDUDJUDSK RI VWDWXWHl8QLWHG6WDWHVY+LJGRQ)GWK † D DQG RI ZKLFK *LOPRUH ZDV FRQYLFWHG LQ WKLV FDVH &LUm:HFRQFOXGHWKDWQHLWKHUWKHSODLQPHDQLQJRI  WKHWHUPµLQWLPLGDWLRQjQRULWVGHULYDWLRQIURPDSUHGHFHVVRU  86& † $ SURYLGHV WKDW VWDWXWH VXSSRUWV +LJGRQ V DUJXPHQW WKDW D WDNLQJ µE\ H 6HUYLFHV RWKHU WKDQ FRXQVHO LQWLPLGDWLRQjUHTXLUHVDQH[SUHVVYHUEDOWKUHDWRUDWKUHDWHQLQJ  8SRQ UHTXHVW&RXQVHO IRU D SHUVRQ ZKR LV ILQDQFLDOO\ GLVSOD\RIDZHDSRQl XQDEOH WR REWDLQ LQYHVWLJDWLYH H[SHUW RU RWKHU VHUYLFHV QHFHVVDU\ IRU DGHTXDWH UHSUHVHQWDWLRQ PD\ UHTXHVW WKHP LQ DQ H[ SDUWH $FRPPRQWKUHDGLQDOORI*LOPRUHjVDFWLRQVLVWKHXVHRI DSSOLFDWLRQ 8SRQ ILQGLQJ DIWHU DSSURSULDWH LQTXLU\ LQ DQ H[ DGHPDQGQRWH7KHYDULRXVQRWHVFRQWDLQHGLPSHUDWLYHVVXFK SDUWH SURFHHGLQJ WKDW WKH VHUYLFHV DUH QHFHVVDU\ DQG WKDW WKH DVm+DQGRYHUPRQH\lm+DQGRYHU\RXUPRQH\lm*LYHPH SHUVRQ LV ILQDQFLDOO\ XQDEOH WR REWDLQ WKHP WKH FRXUW RU WKH 8QLWHG 6WDWHV PDJLVWUDWH LI WKH VHUYLFHV DUH UHTXLUHG LQ \RXUPRQH\lm*LYHWKHQRWHEDFNlDQGm%HTXLHWl:KHQ FRQQHFWLRQ ZLWK D PDWWHU RYHU ZKLFK KH KDV MXULVGLFWLRQ VKDOO WKH QRWHV GLG QRW SURGXFH WKH GHVLUHG UHVXOWV *LOPRUH DXWKRUL]H FRXQVHO WR REWDLQ WKH VHUYLFHV IROORZHG XS ZLWK FRPPDQGV VXFK DV m1R EDLWl m7KDWjV  86& † $H  8QLWHG6WDWHVY*LOPRUH 1R 1R 8QLWHG6WDWHVY*LOPRUH  DIILUPLQJFRQYLFWLRQRIFRQVSLUDF\WRFRPPLWEDQNODUFHQ\ HQRXJKlm/HWjVJRlm*LYHPHWKDWlm+XUU\XSlm1RZl ZKHUH GHIHQGDQW GLVJXLVHG DV D PDLQWHQDQFH ZRUNHU DQGm&RPHRQ\RXNQRZl DWWHPSWHGWRUHPRYH$70IURPVKRSSLQJFHQWHUDQGRWKHU WKHIWVIURPEDQNVQRWLQYROYLQJDGDQJHURIERGLO\KDUP6HH $UHYLHZRIWKHFDVHODZUHYHDOVWKDWPDNLQJDZULWWHQRU HJ8QLWHG6WDWHVY3HWHUVRQ)GG&LU YHUEDOGHPDQGIRUPRQH\WRDWHOOHULVDFRPPRQPHDQVRI H[DPLQLQJ VHQWHQFH RI GHIHQGDQW ZKRVH EDQN ODUFHQ\ VXFFHVVIXOO\UREELQJEDQNV'HPDQGVIRUPRQH\DPRXQWWR FRQYLFWLRQ DURVH RXW RI SDVVLQJ D VHULHV RI EDG FKHFNV LQWLPLGDWLRQEHFDXVHWKH\FDUU\ZLWKWKHPDQLPSOLFLWWKUHDW 8QLWHG6WDWHVY&KDPEHUV1R:/ LIWKHPRQH\LVQRWSURGXFHGKDUPWRWKHWHOOHURURWKHUEDQN DW WK&LU0DUFKDIILUPLQJVHQWHQFHIRUEDQN HPSOR\HHPD\UHVXOW%DQNWHOOHUVZKRUHFHLYHGHPDQGQRWHV ODUFHQ\FRQYLFWLRQWKDWDURVHRXWRIWKHIWRIDQDUPRUHGWUXFN DUHQRWLQDSRVLWLRQWRHYDOXDWHIXOO\WKHDFWXDOULVNWKH\IDFH FRQWDLQLQJRYHUPLOOLRQIURPWKHDUPRUHGWUXFNIDFLOLW\ $VWKH5RELQVRQFRXUWVWDWHGm$QµRUGLQDU\SHUVRQjLQWKH 8QLWHG6WDWHVY7KRUSH)GG&LU WHOOHUjVSRVLWLRQFRXOGUHDVRQDEO\ZHWKLQNLQIHUDQLPSOLFLW H[DPLQLQJVHQWHQFHIRUEDQNODUFHQ\FRQYLFWLRQZKHUHEDQN WKUHDWLQWKHGHPDQGµ*LYHPHDOO\RXUPRQH\jDFFRPSDQLHG HPSOR\HH REWDLQHG EODQN FDVKLHUV FKHFN IRUJHG UHTXLUHG E\WKHSUHVHQWDWLRQRIDµEODFNSRXFKjl5RELQVRQ)G VLJQDWXUH RI EDQN RIILFHU GHSRVLWHG WKH PRQH\ LQWR WZR DW6HYHUDORWKHUFLUFXLWVKDYHDOVRKHOGWKDWDGHPDQG FXVWRPHUDFFRXQWVDQGWKHQZLWKGUHZDQGFRQYHUWHGIXQGVWR IRUPRQH\LQLWVHOILVVXIILFLHQWWRVXSSRUWDMXU\jVILQGLQJRI KLVRZQXVH8QLWHG6WDWHVY7LQNHU1R LQWLPLGDWLRQ6HH8QLWHG6WDWHVY&ODUN)G :/  DW  WK &LU 0D\   DIILUPLQJ WK&LUILQGLQJLQWLPLGDWLRQZKHUHQRWHGHPDQGHG FRQYLFWLRQDQGVHQWHQFHIRUEDQNODUFHQ\ZKHUHEDQNMDQLWRU mDOO RI \RXU WZHQWLHV ILIWLHV DQG KXQGUHG GROODU ELOOVl DQG WRRNWKDWZDVOHIWRXWRIWKHYDXOWE\EDQNWHOOHU GHIHQGDQW VWDWHG WKDW mWKLV LV D KROGXSl+LOO  )G DW  FKDUDFWHUL]LQJ DFWLRQV DV LQWLPLGDWLQJ ZKHUH ,W LV QRWHZRUWK\ WKDW KDG WKH EDQN ODUFHQ\ VWDWXWH EHHQ GHIHQGDQWVWDWHGm*LYHPHDOO\RXUPRQH\lDQGmGRQjWJLYH DSSOLHG LQ WKH SUHVHQW FDVH *LOPRUH FRXOG QRW KDYH EHHQ PHDQ\RIWKHIXQQ\PRQH\lDQGWKUHZDSODVWLFEDJRQWKH IRXQG JXLOW\ RI IHORQ\ EDQN ODUFHQ\ RQ WKUHH RI WKH HLJKW FRXQWHU ZLQGRZ 0F&DUW\  )G DW  DIILUPLQJ FRXQWVEHFDXVHLQWKRVHLQVWDQFHVKHWRRNOHVVWKDQ FRQYLFWLRQRIUREEHU\E\LQWLPLGDWLRQZKHUHW\SHZULWWHQQRWH ,QDQ\HYHQWWKHEDQNODUFHQ\VWDWXWH86&†E VWDWHG m%H FDOP  7KLV LV D UREEHU\l 8QLWHG 6WDWHV Y GRHVQRWILWWKHIDFWVRIWKLVFDVH)RUWKHUHDVRQVH[SUHVVHG +XPPDVWL)GWK&LUFRQFOXGLQJWKDW DERYH WKH EDQN UREEHU\ VWDWXWH  86& † D ZDV WKUHDWZDVLPSOLFLWLQDQRWHWKDWUHDGm7KLVLVDUREEHU\JLYH DSSURSULDWHO\ DSSOLHG KHUH DQG *LOPRUH ZDV SURSHUO\ PH\RXUPRQH\lDQGLQYHUEDOGHPDQGVIRUPRQH\8QLWHG FRQYLFWHGRIYLRODWLQJWKLVVWDWXWH 6WDWHVY6PLWK)GWK&LUILQGLQJ LQWLPLGDWLRQKDGEHHQHVWDEOLVKHGZKHUHGHIHQGDQWVWDWHGm, ZDQW WR PDNH D ZLWKGUDZDO  , ZDQW  LQ ILIWLHV DQG  KXQGUHGVlDQGZKHUHKHWZLFHGHPDQGHGOHDQHGLQWR 7KH VHFRQG SDUDJUDSK RI  86& † E GRHV GHILQH D EDQN WKH ZLQGRZ DQG VDLG mFRPH RQ FRPH RQ JLYH PH WKH ODUFHQ\ PLVGHPHDQRU RIIHQVH IRU WKHIWV RI OHVV WKDQ  PRQH\l/XFDV)GDWILQGLQJLQWLPLGDWLRQZKHUH  WKH YHUEDO DQG ZULWWHQ GHPDQG ZDV mSXW WKH PRQH\ LQ WKH 7KH VHFRQG SDUDJUDSK RI  86& † D SURYLGHV EDJl DQG GHIHQGDQW SODFHG WZR SODVWLF EDJV RQ FRXQWHU :KRHYHU HQWHUV RU DWWHPSWV WR HQWHU DQ\ EDQN FUHGLW XQLRQ +HQVRQ  )G DW  ILQGLQJ LQWLPLGDWLRQ LQ ZULWWHQ RU VDYLQJV DQG ORDQ DVVRFLDWLRQ RU DQ\ EXLOGLQJ XVHG LQ ZKROH RU GHPDQG QRWH WKDW UHDG mSXW ILIWLHV DQG WZHQWLHV  LQWR DQ LQ SDUW DV D EDQN FUHGLW XQLRQ RU DV D VDYLQJV DQG ORDQ HQYHORSHQRZl+RSNLQV)GDWILQGLQJWKDWWKH DVVRFLDWLRQ ZLWK LQWHQW WR FRPPLW LQ VXFK EDQN FUHGLW XQLRQ RU  8QLWHG6WDWHVY*LOPRUH 1R 1R 8QLWHG6WDWHVY*LOPRUH  WKUHDWV LPSOLFLW LQ ZULWWHQ GHPDQG RI m*LYH PH DOO \RXU WKDW *LOPRUH ZDV GHPDQGLQJ PRQH\ DQG KLV GHPDQGV KXQGUHGVILIWLHVDQGWZHQWLHV7KLVLVDUREEHU\lDQGYHUEDO LQGXFHGWKHPWRDFWDFFRUGLQJO\ GHPDQG RI mJLYH PH ZKDW \RX JRWl SURYLGH VXIILFLHQW HYLGHQFHRILQWLPLGDWLRQWRVXSSRUWMXU\jVYHUGLFW ,QVXPWDNLQJWKHHYLGHQFHLQWKHOLJKWPRVWIDYRUDEOHWR WKHJRYHUQPHQWZHFRQFOXGHWKDWWKHSURRIRILQWLPLGDWLRQ ,WLVWKXVFOHDUDQGZHVRKROGWKDW*LOPRUHjVXQHTXLYRFDO ZDV VXIILFLHQW WR FRQYLFW *LOPRUH RI EDQN UREEHU\ XQGHU ZULWWHQDQGYHUEDOGHPDQGVIRUPRQH\WREDQNHPSOR\HHVDUH 86&†DEH\RQGDUHDVRQDEOHGRXEW DVXIILFLHQWEDVLVIRUDILQGLQJRILQWLPLGDWLRQXQGHU86& † D  ,QWLPLGDWLRQ GRHV QRW UHTXLUH SURRI RI H[SUHVV *LOPRUHDUJXHVKRZHYHUWKDWLIKHLVJXLOW\RIDQ\WKLQJLW WKUHDWV RI ERGLO\ KDUP WKUHDWHQLQJ ERG\ PRWLRQV RU WKH LVEDQNODUFHQ\DVGHILQHGLQ86&†E7KHILUVW SK\VLFDOSRVVLELOLW\RIDFRQFHDOHGZHDSRQ7KH5RELQVRQ SDUDJUDSKRI†ESURYLGHV KROGLQJZDVSUHGLFDWHGRQWKHGHWHUPLQDWLRQWKDWDGHPDQG QRWHFDQFUHDWHLQWLPLGDWLRQ7KHGHFLVLRQGLGQRWUHVWRQWKH :KRHYHUWDNHVDQGFDUULHVDZD\ZLWKLQWHQWWRVWHDORU DGGLWLRQDOILQGLQJWKDWWKHUREEHUZRUHDOHDWKHUFRDWmVRWKDW SXUORLQ DQ\ SURSHUW\ RU PRQH\ RU DQ\ RWKHU WKLQJ RI DZHDSRQFRXOGSUHVXPDEO\KDYHEHHQFRQFHDOHGl5RELQVRQ YDOXH H[FHHGLQJ  EHORQJLQJ WR RU LQ WKH FDUH )GDW7KDW*LOPRUHZRUHQRVXFKFRDWGRHVQRW FXVWRG\FRQWUROPDQDJHPHQWRUSRVVHVVLRQRIDQ\EDQN LQDQ\SULQFLSOHGZD\GLVWLQJXLVKWKLVFDVHIURP5RELQVRQ FUHGLWXQLRQRUDQ\VDYLQJVDQGORDQDVVRFLDWLRQVKDOOEH ILQHG XQGHU WKLV WLWOH RU LPSULVRQHG QRW PRUH WKDQ WHQ 3HUKDSV*LOPRUHjVREYLRXVGLVJXLVHVDQGKLVUHVXOWLQJRGG \HDUVRUERWK DSSHDUDQFH ZHUH QRW LQ DQG RI WKHPVHOYHV LQWLPLGDWLQJ +RZHYHUWKHGLVJXLVHVGLGLQGHHGDOHUWEDQNHPSOR\HHVWKDW 86&†E7KH6XSUHPH&RXUWKHOGLQ&DUWHUY *LOPRUHZDVXSWRQRJRRG2QHQRUPDOO\GRHVQRWZHDUD 8QLWHG 6WDWHV  86   WKDW EDQN ODUFHQ\  IDNHJRDWHHWRFRQGXFWOHJLWLPDWHEXVLQHVVLQDEDQN7KHMXU\ 86& † E LV QRW D OHVVHU LQFOXGHG RIIHQVH RI EDQN LQWKLVFDVHSHUPLVVLEO\FRXOGKDYHLQIHUUHGWKDW*LOPRUHjV UREEHU\  86& † D EHFDXVH † E FRQWDLQV DSSHDUDQFHFRQWULEXWHGWRWKHWHOOHUVjDSSUHKHQVLRQDQGIHDU WKUHHHOHPHQWVQRWUHTXLUHGE\†DQDPHO\VSHFLILF 6HH 0F&DUW\  )G DW   /LNHZLVH WKRVH EDQN LQWHQWWRVWHDODVSRUWDWLRQDQGYDOXDWLRQH[FHHGLQJ HPSOR\HHVZKRUHFRJQL]HG*LOPRUHIURPSUHYLRXVEDQNYLVLWV &DUWHU86DW DOVRPD\KDYHVXIIHUHGVRPHDGGLWLRQDODSSUHKHQVLRQ $UHYLHZRIWKHFDVHVRQ†EUHYHDOVWKDWWKLVVWDWXWH ,QVHYHUDORI*LOPRUHjVUREEHULHVEDQNWHOOHUVWHVWLILHGWKDW LVQRWXWLOL]HGLQFDVHVZKHUHLQGLYLGXDOVSUHVHQWGHPDQGVWR WKH\ZHUHVFDUHGRUIHDUIXO:KLOHDVZHKDYHQRWHGDERYH EDQNWHOOHUV,QVWHDGWKHEDQNODUFHQ\VWDWXWHLVDSSOLFDEOHLQ WKH WHVW IRU LQWLPLGDWLRQ LV HVVHQWLDOO\ DQ REMHFWLYH RQH FDVHV ZKHUH SHUVRQV VWHDO IURP D EDQNjV DXWRPDWHG WHOOHU HYLGHQFH WKDW mWKH WHOOHU IHOW WKUHDWHQHG LV SUREDWLYH RI PDFKLQHm$70lVHH8QLWHG6WDWHVY0DUVKDOO)G ZKHWKHUDUHDVRQDEOHSHUVRQZRXOGKDYHEHHQDIUDLGXQGHUWKH WK&LUDIILUPLQJEDQNODUFHQ\FRQYLFWLRQ VDPHFLUFXPVWDQFHVl+LOO)GDWFLWLQJ6PLWK ZKHUHGHIHQGDQWDFRXULHUZKRVHUYLFHG$70VIRUWKHEDQN )GDW+LJGRQ)GDW7KHMXU\ZDVHQWLWOHG XVHG NH\V DQG DFFHVV FRGHV WR WDNH  IURP $70 WR FRQVLGHU WKH WHOOHUVj IHDU LQ DVVHVVLQJ WKH LQWLPLGDWLQJ 8QLWHG6WDWHVY+DUELQ1R:/DW QDWXUH RI *LOPRUHjV FRQGXFW  ,Q VHYHUDO RI WKH EDQNV  WK &LU 0D\   DIILUPLQJ EDQN ODUFHQ\ *LOPRUHjVGHPDQGQRWHZDVQRWUHDGE\WKHWHOOHU+RZHYHU FRQYLFWLRQZKHUHIRUPHUHPSOR\HHRI$70VHUYLFHUXVHGD WKLVIDFWGRHVQRWOHVVHQWKHLQWLPLGDWLRQ7KHWHOOHUVNQHZ FRS\RIWKH$70NH\WRWDNHRYHUIURP$708QLWHG 6WDWHV Y :LOOLV  )G   WK &LU